Mega mergers: all for the clients or an ego thing?

Such seismic change we have seen in the Australian legal market in 2012! A landscape that was once dominated by national mega-firms is now dominated instead by global mega-firms.

Almost the entire top tier has merged with, been consumed by or strategically aligned with a monster brand from overseas in what has definitely not been described by anyone as a Magic Circle mopping-up operation.

On the mega-firm websites, the word of the moment is “global".

As one firm gloriously describes the rationale, what it creates is a “leading origin-to-destination service across a single global platform". Isn’t that Fedex?

All this, we are told, came about not because there was a sudden panic in London after Clifford Chance bought Chang Pistilli & Simmons, and a rush for the first class lounge at Heathrow as senior partners packed their tropical kit and headed south to buy a firm in the colonies before they were all gone, but because coincidentally everyone’s clients demanded at the same time that their law firms go global.

Clients, they say, “recognise the benefits a greater global perspective will bring to their matters".

Oddly, the same clients have been telling Minters, Corrs, Clayton Utz and Gilbert + Tobin that what they really want is a national firm with global reach, rather than a global firm with national reach.

Just how much does this merger mania have to do with what clients want? Starting with the anecdotal, none of our clients has asked us to open so much as a Melbourne office. But what would they know?

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All of the research into how people choose their lawyers reinforces that this is a business of personal relationships. Lawyers are chosen on trust. If my client needs lawyers overseas, they invariably accept my recommendation.

I’m reminded of a period when a partner at a Melbourne mega-firm used to refer work to me, because she didn’t like her firm’s Sydney office. No doubt her clients knew the firm was national, but went with her preference, presumably on trust. That’s not surprising.

What is surprising is the notion that clients are stupid enough to think that consistency in branding equates to consistency in quality, for a service which consists entirely of intellectual effort. Hamburgers, sure. Lawyers, not so much.

Merged firms do get large volumes of referrals from their global network. Great, but irrelevant. As I said, most clients go where their trusted lawyer directs.

I totally get the perceived benefits of global merger. There’s nothing wrong with becoming part of an international behemoth, if that’s what gives your life meaning – even if it means massive and immediate cultural change and a loss of autonomy as your firm struggles to produce the requisite return to justify a seat at the big table.

And everyone gets new t-shirts. So, yay, Australia’s finally on the world map. I just don’t buy that the clients asked for it.